TRICARE options for retirees and their families

TRICARE health coverage is a valuable benefit of military service, and that value continues after retirement. The costs of TRICARE for retirees and their families is a little different that TRICARE for active duty, but it is still exceptional coverage at an excellent price.

Just like active duty folks, retirees and dependent family members under age 65 may choose TRICARE Prime or TRICARE Standard and Extra. Retirees and dependent family members age 65 and older use TRICARE For Life in conjunction with Medicare.

Tricare Standard (and Extra)

At the time of retirement, all retirees and their dependent family members are automatically switched to Tricare Standard and Extra. (Of course, this could get messed up, so always double check.)

Retired families pay no annual premium for TRICARE Standard.

There is an annual deductible of $150 for a retiree, or $300 for a retiree plus family members. This deductible applies to your annual catastrophic cap. You will pay for services in full until you meet the annual deductible each year.

Once you have paid your deductible, then you will pay a portion of each service until you meet your annual catastrophic cap. You will pay co-pays or cost-shares. A co-pay is a set amount paid per service. A cost-share is a percentage of the cost of a service.

The annual catastrophic cap for TRICARE Standard is $3000 per retiree and any family members. This is the most the retiree (family) will pay in a year, excluding these exceptions:

Services not covered by TRICARE

Any amount that non-participating providers may charge above the TRICARE’s maximum allowable charge

TRICARE Prime point-of-service charges (if applicable)

Monthly premiums for TRICARE Young Adult.

Items that do count towards the annual catastrophic cap include:

Annual deductibles (if applicable)

Pharmacy copayments

Other cost shares based on TRICARE-allowable charges.

Note: Tricare Extra is a program within TRICARE Standard that allows patients to save money by using TRICARE providers. Participating providers agree to accept TRICARE-allowable charges as payment in full, after the patient pays the appropriate co-pay or cost-share. Most people don’t bother using the term TRICARE Extra, and call the whole program TRICARE Standard. (Which it is, but it can be confusing when some people differentiate between the Extra coverage and other people don’t.)

TRICARE Prime

Retirees and their family members may elect to use TRICARE Prime for their health care. Retirees pay an enrollment fee for TRICARE Prime. The cost is $282.60 per year for an individual, or $565.20 for a family of any size.

There is no deductible for most care under TRICARE Prime, if you use your Primary Care Manager for most care, receive referrals for outside care, and seek authorizations as required.

If you use the point-of-service option, you will have a deductible for those services; $300 per individual or $600 per family, per year. (The point-of-service option is for when you choose to receive care without going through the regular TRICARE process. It is expensive!)

Retirees and their family members do pay co-payments for some care under TRICARE Prime.

The annual catastrophic cap for TRICARE Prime is $3000 per retiree and any family members. This is the most the retiree (family) will pay in a year, excluding these exceptions:

Services not covered by TRICARE

Any amount that non-participating providers may charge above the TRICARE’s maximum allowable charge

TRICARE Prime point-of-service charges (if applicable)

Monthly premiums for TRICARE Young Adult.

Items that do count towards the annual catastrophic cap include:

Annual deductibles (if applicable)

Pharmacy copayments

Other cost shares based on TRICARE-allowable charges.

Tricare Supplemental Insurance

TRICARE beneficiaries may reduce their overall costs by purchasing a TRICARE supplement. A supplement is a specially-designed secondary insurance plan that works with TRICARE Prime. Costs and benefits will vary by plan and family details. A supplemental policy may cover your deductible, co-pays, cost-shares, and/or excess charges – every plan is different.

Employer-Sponsored Health Insurance

Retired military families who are employed may be eligible for health insurance through their employers. In this case, TRICARE will act as secondary insurance. Under federal law, TRICARE must pay second unless the other policy is a specially designed TRICARE supplement.

Each family needs to consider their options, medical needs, local area health care providers, and how the two plans would work together before deciding if purchasing employer-sponsored health care is a good choice for their situation.

Note: Many employers offer high deductible health plans in conjunction with a health savings account (HSA.) TRICARE-eligible persons are ineligible for HSAs. Be sure to review your employer’s offerings completely. This is well beyond the scope of this article, but I include this note so that you can know to get more information about this topic.

TRICARE for Life

When you become eligible for Medicare, typically at age 65, you are no longer eligible for TRICARE Standard or TRICARE Prime. Instead, TRICARE for Life acts as wrap-around coverage to complement your Medicare benefits.

There are no enrollment fees, deductibles, co-pays or cost-shares for TRICARE for Life, but you must be enrolled in Medicare Part B coverage and pay the appropriate premiums. You will pay nothing for care that is covered by both TRICARE and Medicare.

Every year, there are calls to increase the costs for retirees using TRICARE. There have been no recent major changes, but they may occur at some point in the future. (Most people think it will probably happen, sooner rather than later.) While TRICARE is amazing insurance, and will likely remain a valuable benefit, it may become less generous.